Schizophrenia and other psychotic disorders are serious and debilitating mental illnesses that incur substantial suffering for patients and major challenges to our health care system. The clinical high-risk (CHR) prodromal phase is the period prior to the onset of psychosis when clinical symptoms gradually emerge and function declines. The presence of a CHR syndrome in young adults is associated with heightened risk (~30%) for the later development of psychosis. The North American Prodrome Longitudinal Study (NAPLS) and other CHR studies have made substantial progress towards predicting psychosis, and in showing an accelerated reduction in prefrontal cortex (PFC) gray matter (GM) density in CHR converters from pre- to post-psychosis onset, but the mechanisms driving conversion remain elusive, partly because no studies include repeated measures prior to the onset of psychosis. In NAPLS2, we found that disrupted resting-state (rs) thalamo- cortical functional connectivity prior to psychosis predicts conversion and correlates with rate of GM decline, but we do not know if rs-dysconnectivity is progressive during the prodrome. Furthermore, in NAPLS2, plasma markers of pro-inflammatory cytokines at baseline predicted the rate of GM loss in converters; these same markers also correlated with rs-dysconnectivity. We do not yet know whether these inflammatory markers drive the changes in brain structure/function or are consequences of these changes. Similarly, higher levels of cortisol, and lower mismatch negativity predicted psychosis and the rate of PFC GM decline and were correlated with each other and with measures of rs-connectivity and cytokines. This application is a competitive renewal for a nine-site, longitudinal study aimed at identifying the brain processes underlying the progression of the clinical syndromes that characterize the psychosis prodrome. The goals are: 1) to determine the pre-onset trajectories of GM decline and disrupted resting-state brain connectivity in CHR individuals who develop psychosis using MRI, and 2) to identify inflammatory and plasticity mechanisms associated with transition to psychosis. Over a two-year period, the study will repeatedly measure these indicators, and at the same time examine changes in physiological indices of brain function, social and cognitive functioning, and symptom progression. The multi-site collaboration will follow large CHR (n= 378) and demographically matched comparison (n= 162) samples that will undergo comprehensive assessments of biological and behavioral changes. This approach will answer important questions about the origins of the brain changes that give rise to psychosis and will provide insights into likely approaches to halting or mitigatig the pathological process and advance our understanding of risk prediction, both critical steps in prevention.